Sapiano

This declaratory relief action construes a subrogation clause in a commercial vehicle insurance policy. The trial court held the insurer cannot assert its contractual right to repayment from the insured’s recovery against the third party tortfeasor, because the total amount available from the insurance and the third party is insufficient to compensate the full loss suffered by the insured. We affirm.

Factual and Procedural Background

The facts were stipulated below. Plaintiff and respondent Anthony R. Sapiano is the insured under a vehicle insurance policy issued by defendant and appellant Williamsburg National Insurance Company. The policy provided extended collision coverage on Sapiano’s 1975 Peterbilt truck and trailer combination in the stated amount of $15,000, minus a $500 deductible. On January 10, 1989, Sapiano’s vehicle was ‘totalled” in a collision with an automobile negligently stopped on the freeway by one Gamaliel Valdepena. Just prior to the collision Sapiano’s vehicle was worth more than $20,000; it had been purchased for $25,000.

On February 13, 1989, Williamsburg paid Sapiano $14,500 for the property damage to his vehicle, which was the maximum policy…